[GNC] How to process a purchase made without paying VAT and add it as an investment to be later depreciated

[Jeremy D]

Hi Geert, Frank,

First of all, I really appreciate the feedback.








*assets:         VAT reimbursable                 Buys @ full rate: 21%
            : liabilities:         VAT                 Sales: 21%
      Import with VAT ID: 21%*

This resembles more or less what my accountant told me to do. Also he
strongly advised against the use of foreign VAT accounts for any of my
purchases (as a matter of fact I still have only two accounts - VAT
Receivable/VAT Payable -, and both are in use for Belgium). That's why
there's no tax table in the example sent, I just added and subtracted the
VAT manually. However, this solution creates a problem in that the
Liabilities placeholder account now has increased so much and I don't know
what the next step is.

My accountant and I created the example in my first message together but,
as he isn't familiar with Gnucash (he found it very difficult to use), I'm
afraid it might contain errors.

I'm not an accountant by any means but I at least want to be able to
understand what I'm doing with regards to Gnucash.

If it's not too much trouble, would you perhaps be so kind as to send me
one finished example of the former? Just to make sure I'm understanding
this correctly. I'm providing an early copy of my own Gnucash file in
attachment (I deleted all transactions first but all accounts necessary are
still there).

*I hope, you did not, because negative amounts are reserved for stornos.*

You mean, like in the case of a reimbursed expense?

Thanks for the support!

Jeremy

2018-07-13 21:35 GMT+02:00 Frank H. Ellenberger <
frank.h.ellenberger at gmail.com>:

> Hi,
>
> Am 13.07.2018 um 17:42 schrieb Geert Janssens:
> > I don't have access to a gnucash installation currently so I can't
> verify my suggestion.  But this is how I would handle it.
> >
> > - create two vat asset accounts. One for the Belgian vat and one for the
> foreign vat.
> > - create a tax table (which is all about vat) for your intra-European
> purchases. This tax table should have 2 entries
> > 1. Belgian vat (typically 21%), assigned to the Belgian vat account
> > 2. Foreign vat, which should be the negative percentage of the Belgian
> vat  (so typically -21%), assigned to the foreign vat account.
>
> While most you are writing seems pretty simular to the situation in DE.
> I would not use negative rates. Instead I would use the folowing setup:
> assets:
>         VAT reimbursable
>                 Buys @ full rate: 21%
>                 :
> liabilities:
>         VAT
>                 Sales: 21%
>                 Import with VAT ID: 21%
>                 :
> For an optimal grouping of different rates, other cases of imports etc.
> compare your setup with your tax forms and discuss it with your CPA.
>
> With the rest, I aggree:
>
> > - now you can set tge default vat for your German vendor to this tax
> table.
> > When you enter you vendor bill on each line you enter the values without
> vat and double check the tax table is still the one for intra-European
> purchaes.
> > - note the purchase of a laptop should also go to an asset account
> (investment) so that's what you should enter as account in the entry (an
> entry is one line on your bill)
> >
> > - after posting this bill I believe it should create the correct
> transaction for you, including two vat entries in your assets and the net
> amount of the lap3in an investment account that can be used for
> depreciation.
> > - in addition the bill will be posted for the net amount such you can
> apply the correct payment.
> >
> > The only small detail I don't remember is whether I have changed the
> gnucash code already to allow negative percentages in tax tables. I think I
> have though.
>
> I hope, you did not, because negative amounts are reserved for stornos.
>
> > Geert
> >
> > Jeremy D <jeremy.defrere at gmail.com> schreef op 12 juli 2018 22:34:43
> CEST:
> >> Hi,
> >>
> >> Someone on the #gnucash IRC channel suggested I write this message as I
> >> have quite a complex issue.
> >>
> >> Basically I've made a few purchases the last few months, most of which
> >> I
> >> paid without VAT.
> >>
> >> Here's a concrete example to help you better understand.
> >>
> >> I bought a laptop. This laptop cost € 2016, VAT included. However, as i
> >> have a VAT number, I paid only € 1694,12.
> >>
> >> A few prerequisites:
> >>
> >>
> >>   - My accountant wants me to include foreign VAT as an asset and also
> >> include Belgian VAT as an asset. He calls that a "null operation" but
> >> it's
> >>   necessary, he says.
> >>   - Looking at my transaction report, we noticed the balance for each
> >>   month isn't correct. It should be equal to zero.
> >>  - This purchase has to be used as an investment (asset account) which
> >>   can then be depreciated each year.
> >>
> >>
> >> I thought I was able to solve the problem by creating a bill linked to
> >> the
> >> vendor (Business\Vendor\New Bill), then posting the bill and processing
> >> the
> >> payment - amount without VAT linked to checking account/VAT in the
> >> separate
> >> VAT account. Below are screenshots of that:
> >>
> >> [Purchase minus German VAT]
> >>
> >>
> >>
> >> [Purchase minus Belgian VAT]
> >>
> >>
> >>
> >> But the Liabilities:VAT Sales:Belgium looks totally messed up. To be
> >> honest, I don't think I know what I'm doing anymore. I've tried many
> >> things
> >> already but to no avail...
> >>
> >> Thank you in advance for the feedback.
> >>
> >> Jeremy
>
> Regards
> Frank
>